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Form 700s

Conflict of interest forms allow local officials to report few details about economic interests

By Chris Nichols
News-Sentinel Staff Writer
Updated: Saturday, May 10, 2008 5:52 AM PDT

If you're curious about the economic interests of your city leaders, the state's mandated disclosure forms won't tell you much.

Top officials and elected representatives from Lodi and Galt filed their Form 700s, or conflict of interest forms, this spring.

Of the many filings, however, only a small fraction detail anything about the leaders' investments, real estate holdings or gifts they've received.

Without any financial kingpins in Lodi or Galt government, it makes sense that there's not much listed, said several political observers.

Yet with the form's many disclosure exceptions, its vague requirements and the fact that they're not all audited, at least one government watcher says the 700s give a "murky" look at politician's holdings.

"It's not so much that people don't tell the truth on the forms," said Bob Benedetti, a longtime political science professor at the University of the Pacific in Stockton. "(But) it's hard to tell what it means."

In Galt, four of five city council members checked the box "no reportable interests on any schedule," signaling they don't own any stocks, conduct any private sector business in Galt or own any real estate aside from their home in the city.

Lodi city leaders were only a bit more specific.

And that's likely because they didn't have to be.

Politicians don't have to list any information about their private sector job if their employer doesn't do business in the city they represent.

If a council member has a day job with the state or a separate local government, they're not required to list that job or income either. Also, there's no requirement for officials or elected leaders to disclose anything about their savings, money market or retirement accounts or vacation property — unless they use it as a business deduction.

Even when officials do list the investments, property or businesses they own, they're only asked to give general descriptions of them and their value.

"The form is not designed to tell you how much they're worth, just if they have any conflict of interest," said Bob Stern, who helped draft the Political Reform Act of 1974, making the disclosure forms law.

'We're just basic, average people'

Several local leaders defended their filings, noting they've disclosed everything the state requires.

Lodi City Councilman Bob Johnson said his forms are a bit boring because he's "a plain vanilla guy."

"I'm not a wealthy individual," said Johnson, who works part-time as a real estate appraiser in Lodi. "I think I filled the forms out adequately and accurately. Just because I don't fill out 21 pages, that doesn't mean it's remiss."

  • Lodi Mayor JoAnne Mounce, an accountant; stock in the Cellars & Buyers Club LLC; her company, JoAnne's Bookeeping, and a private sector employer, Dougherty CPAs Inc., based in Stockton.

  • Lodi Councilman Bob Johnson, a part-time real estate appraiser; his company, Bob Johnson Real Estate Appraisal.

  • Lodi Councilman Larry Hansen, a retired city of Lodi police chief; did not report any investments, property, income or gifts.

  • Lodi Councilman Phil Katzakian, president of a Lodi company; his business, Lodi Printing Co.

  • Lodi Councilwoman Susan Hitchcock, principal at Clairmont Elementary School in Lodi; investments in Farmers and Merchants Bank; six Lodi rental properties owned by her or her husband, Jerry Glenn.

    Source: Form 700s, city of Lodi leaders


  • Galt Mayor Andrew Meredith, an electrician for NMI Industrial in Sacramento; did not report any investments, property, income or gifts.

  • Galt City Councilman Tim Raboy, an investigator in Sacramento for the Board of Equalization; did not report any investments, property, income or gifts.

  • Galt City Councilman Don Haines, an investigator in Sacramento for the Board of Equalization; did not report any investments, property, income or gifts.

  • Galt City Councilman Darryl Clare, vice president for Modesto-based Westland Technologies; two dinners in Washington, D.C. from April 2007, estimated at $120 each, and paid for by Sutter Health, Teichert Materials, Bob Dawson and Gregory Thatch.

  • Galt City Councilwoman Barbara Payne, retired; did not report any investments, property, income or gifts.

    Source: Form 700s, city of Galt leaders
  • There's nothing too spicy on the Galt forms either, as it should be, Galt City Councilman Tim Raboy said.

    "We're just basic, average people," Raboy said of his fellow Galt council members, noting cities should be represented by folks with rather plain economic interests.

    Raboy, along with Galt Councilman Don Haines, works in Sacramento as an investigator for the state's Board of Equalization.

    Back in Lodi, Johnson and Councilman Phil Katzakian listed their businesses in town as required.

    And Councilwoman Susan Hitchcock disclosed her and her husband's rental properties in the city.

    Notably, only one of the 10 council members between the two cities — Galt City Councilman Darryl Clare — listed any gifts he had received in the past year above $50, as the forms mandate.

    Lodi's city manager, attorney and clerk also marked "no reportable interests," along with Galt's city manager, treasurer and clerk. Galt's attorney, who is contracted through a private firm, listed the name of his company and reported that he earns "over $100,000."

    The lack of detailed responses surprised Stern, who served as general counsel for the FPPC for nine years and now heads the Center for Government Studies, a Los Angeles-based think tank.

    "If they're all retired, I'd understand," he said. "It is surprising that (almost) no gifts are listed at all. Most city council members do receive gifts."

    Clare, the lone councilman to report a gift, said he has no reason to hide the two dinners he accepted last year on a Washington D.C. lobbying trip.

    One was sponsored by Sutter Health. If Clare had hypothetically met the head of the hospital giant and convinced them to build in Galt, "Well, then that might be the best dinner I ever attended," the councilman said.

    Several leaders in Lodi and Galt said they make it a personal rule not to accept freebies.

    Raboy said he feels no politicians should be allowed to accept gifts. He doesn't even take campaign contributions, he noted.

    Some will expense event tickets to the city, noted Hitchcock, the Lodi councilwoman.

    "No one ever gives me any gifts," she noted, then added she may have taken some hand cream from a delegation from Lodi's sister city in Lodi, Italy some time back.

    A track record

    While the Form 700s aren't investigated too often, there's always the chance they will be.

    That prospect, plus the $5,000 penalty per violation attached to the forms, keeps most politicians in check, several government watchers noted.

    More than 100,000 government workers fill out Form 700s each year, noted Roman Porter, the commission's spokesman. He said he could not characterize how detailed most forms are, noting the commission's policy precludes him from doing so.

    About 20,000 forms are sent from local juridictions to the FPPC's Sacramento offices, including forms for all elected officials, city managers, city treasurers and city planning commissioners.

    Of those, about 90 percent get a full review, Porter said.

    Matt Wetstein, a former political science professor at Delta College, said Stockton City Councilman Dan Chapman provides a stark example of why disclosing economic interests is important.

    Chapman is the president of the Stockton Thunder, a minor league hockey team that plays at the city-subsidized Stockton Arena.

    Chapman has consistently recused himself from votes on matters that affect the team and arena.

    Of course, being in business isn't necessarily a bad thing for city leaders, noted Benedetti, the Pacific professor.

    "I would want them to have serious managerial abilities — they've got to get it somewhere," he noted, adding that business owners in government can and do separate themselves from their own interests.

    Kimberly Nalder, an assistant professor of government at California State University, Sacramento, likened the Form 700s to one of the many "institutional mechanisms" present in government.

    She said they're used not so much to check up on politicians but to present the possibility that they will be.

    "It's worth having them go through the process because it probably leads to more honest behavior than if we didn't," Nalder said.

    The forms will follow the leaders throughout their careers, she noted.

    Contact reporter Chris Nichols at chrisn@lodinews.com.

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    Observer wrote on May 12, 2008 12:38 PM:

    " papercut, we already know who you are....all you have to do is hang out once in a while at HOC. Glad to see you patronizing one of the local businesses. "

    papercut wrote on May 11, 2008 1:50 PM:

    " Enjoy, old timers and Happy Mothers' day. "

    papercut wrote on May 11, 2008 1:49 PM:

    " I see you old timers are out with your other two blog names. That old T & C must really upset you? Guilty conscience? Again , you add nothing to these blogs but accusatory facts you have no basis for. Old T & C will love this. You'll be the laughingstock of these board when you find out who I really am, if you aren't already. "

    Observer wrote on May 11, 2008 12:56 PM:

    " oldguy, of course papercut is the former Taxpayer. Same old venom and hatred. But isn't it great to have him back. You'd think he'd would have taken the opportunity to change his MO. But no, it's the same old accusations with no factual information. Believe me, if he had fact he'd disclose them. Don't forget when he was telling us about all those who were about to be arrested. SOS. "

    oldguy wrote on May 11, 2008 10:12 AM:

    " Papercut: You sound just like the old T & C. You make statements that have absolutely no basis of fact. If you are aware of any of the councilmembers who have not reported facts truthfully or accurately you owe all of us to make that information known. Unless you really have something why do you make such outrageous statements. Does it make you feel important? "

    papercut wrote on May 11, 2008 9:15 AM:

    " scrutiny don't forget the high electric rates, garbage, water, sewer and lack of good paying jobs by your city council. "

    Scrutiny wrote on May 10, 2008 9:11 PM:

    " Ya! And the Lodi City Council is responsible for the price of gas too! Iraq? Lodi City Council`s fault! Global warming? Obviously a plot hatched in secret by the Lodi City Council! "

    papercut wrote on May 10, 2008 4:24 PM:

    " I really didn't expect any blogs on this one from Commonsense, commonsense, commonsense1, real facts nor blogs on this issue from anyone involved in the city or management or those $99 contributors and redevelopment specialists. "

    Edumacation wrote on May 10, 2008 11:53 AM:

    " To papercut: I agree with most of what you said except for the part about the "heart attacks when voters lean about the UNREPORTED information. I think most Lodi voters are so tired of the political games of our councilmen and "leaders" that they probably expect the subterfuge that goes on behind closed doors. Its really too bad that a few have co-opted the interests of the citizens of Lodi and subordinated to their selfish economic and political goals. "

    papercut wrote on May 10, 2008 10:10 AM:

    " It never ceases to amaze me to think that those certain groups, individuals and families here can think that they are squeaky clean. When our government leaders can leak top secret and grand jury information why do those select few here in your town think that no one knows their closet and hidden secrets too? You remind me of a closet full of Bob Novaks from CNN. "

    papercut wrote on May 10, 2008 10:06 AM:

    " I'd say by looking at those 700's at a glance that Ms. Hitchcock and Ms. Mounce are the only two close to disclosing anything close to their real assets, investments and holdings. The other three I have a real credibility problem with. The inner circle knows where those three are feeding from. "

    papercut wrote on May 10, 2008 10:01 AM:

    " It seems that Vallejo used the same redevelopment as Milpitas instituted. It was your now city Manager, Blair King, that was instrumental in that redevelopment in Milpitas. And guess who the city clerk was? Ms. Randi Johl, your own Lodi city clerk. Scary? You bet. "

    wtf wrote on May 10, 2008 9:25 AM:

    " papercut, you forgot to add that when they're in bed and/or own the local media or otherwise, it makes things easier, too. This felt like a "fluff" piece; nothing to see here, folks. Move along. I would put these people under a magnifying glass; especially given the state of the current economy. Just look at the city of Vallejo who have recently declared bankruptcy two and a half years after they began a redevelopment scheme that was "supposed" to have that city rolling in dough. "

    papercut wrote on May 10, 2008 8:44 AM:

    " It's likened to your own city council who will appoint themselves as board of the redevelopment committee and then take on their own associates and co-investors as consultants and overseers. Just watch the same names crop up over and over when they pass the redevelopment issue soon. When you make your own rules it's easy to win the game.
    "

    papercut wrote on May 10, 2008 8:36 AM:

    " At least half the city of Lodi would have a major heart attack if those running for office in your little town disclosed EVERYTHING they had any kind of financial interests in. They're all a part of that never ending viscious circle. This is just another ploy the same as those unaccounted for $99 donations or less that don't have to be reported as contribution donations. When you're the same one making these rules for yourself and associates, it's easy to tip the game in your favor with your own rules. "

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